U.S. Cracks Down on "Reverse Redlining"


In all the fallout from the housing crisis, few groups have suffered as much as blacks and minorities, who were saddling with risky subprime loans at rates far higher the whites with the same incomes or credit scores.

Yesterday, the Civil Rights Division of the U.S. Department of Justice announced that it's launching a new unit specifically to fight racial discrimination in lending, including mortgage lending. This is history in the making. The feds have in the past cracked down on discrimination by landlords and real estate agents by enforcing fair housing laws, used the Home Mortgage Disclosure Act to expose patterns of exclusion by mortgage lenders, and put out research like last year's report from the Commission on Civil Rights about how targeting of minority borrowers fueled the mortgage crisis.

But this is the first time that law enforcement at the national level has stepped up to target discrimination in mortgage lending as an issue in its own right.

The new Fair Lending Unit's main focus will be "reverse redlining," and to understand what that means it helps to get a quick history lesson.